- Major global crypto companies are scaling back their U.S. operations due to unfavorable regulatory environment.
- In response to the escalating crisis, Senator Cynthia Lumis is working on a new regulatory framework for cryptocurrency trading in America.
The American cryptocurrency industry has hit a rough patch following the Securities and Exchange Commission’s (SEC) decision to label several high-profile cryptocurrencies as securities. This move has sent shockwaves throughout the sector and without legislative intervention, the industry’s future appears uncertain.
Recognizing the urgency of the situation, Senator Cynthia Lumis has stepped up to the plate, pledging to work on
“a regulatory framework that will allow individuals and companies to own and trade digital assets in America.”
In the aftermath of the SEC’s decision, prominent crypto firms, including Binance and Coinbase, have been slapped with lawsuits accusing them of selling unregistered securities. The immediate fallout saw Coinbase’s stock value tumble by 18% and Binance U.S. being compelled to suspend USD deposits and withdrawals. Binance was particularly critical of the SEC’s approach, pledging to challenge the “aggressive” regulations.
Even before this latest SEC action, a global shift in the crypto landscape had begun, with less emphasis on the U.S market. For instance, 2023 witnessed a 30% increase in Asian hourly spot volumes amidst declining volumes in the U.S.
Taking note of the evolving dynamics, Polygon Labs, a major player in the industry, has issued a statement emphasizing its global outlook and downplaying the SEC’s classification of its MATIC token as a security. They stated,
“The non-US market is the largest in the world, and we are grateful for all the thoughtful work being done on all aspects of this technology around the globe, including by regulators & policymakers.”
As businesses pivot away from the U.S. and altcoin markets experience significant crashes, Senator Cynthia Lumis, often dubbed the “crypto queen” of the U.S. Senate, has emerged as a potential rescuer. On a recent Saturday evening, Lumis announced her commitment to developing a regulatory framework facilitating digital asset trading in America. Previously, Lumis co-authored the “Responsible Financial Innovation Act” with Democratic Senator Kirsten Gillibrand, aimed at introducing a clearer regulatory environment for cryptocurrencies.
While this bill has been stalled due to market volatility and legislative inertia, Lumis revealed in an interview earlier this year that they were working on a new, more robust version of the bill. She stressed the need for more decisive legislation in determining what constitutes a commodity and what qualifies as a security, aiming to prevent lawsuits currently shackling the industry.